<PAGE>
Exhibit 10.7
EXECUTION COPY
$100,000,000
AMERICAN ROCK SALT COMPANY LLC
9 1/2% Senior Secured Notes due 2014
PURCHASE AGREEMENT
March 5, 2004
JEFFERIES & COMPANY, INC.
520 Madison Avenue
12th Floor
New York, NY 10022
Ladies and Gentlemen:
American Rock Salt Company LLC, a New York limited liability
company
(the "Company") hereby agrees with you as
follows:
1. Issuance of Notes. Subject to the terms and conditions
herein
contained, the Company proposes to issue
and sell to Jefferies & Company, Inc.
(the "Initial Purchaser") $100,000,000
aggregate principal amount of 9 1/2%
Senior Secured Notes due 2014 (each a
"Note" and, collectively, the "Notes").
The Notes will be issued pursuant to an
indenture (the "Indenture"), to be dated
as of March 17, 2004, between the Company
and U.S. Bank National Association, as
trustee (the "Trustee"). Capitalized terms
used, but not defined herein, shall
have the meanings set forth in the
Indenture.
The Notes will be offered and sold to the Initial Purchaser
pursuant to
an exemption from the registration
requirements under the Securities Act of
1933, as amended (the "Act"). Upon original
issuance thereof, and until such
time as the same is no longer required
under the applicable requirements of the
Act, the Notes shall bear the legends set
forth in the final offering circular,
dated the date hereof (the "Final Offering
Circular"). The Company has prepared
a preliminary offering circular, dated
February 20, 2004 (the "Preliminary
Offering Circular"), and the Final Offering
Circular relating to the offer and
sale of the Notes (the "Offering").
"Offering Circular" means, as of any date or
time referred to in this Agreement, the
most recent offering circular (whether
the Preliminary Offering Circular or the
Final Offering Circular, and any
amendment or supplement to either such
document), including exhibits and
schedules thereto.
In connection with the sale of the Notes, the Company is
concurrently
entering into a new senior secured credit
facility between the Company and
Manufacturers and Traders Trust Company,
which provides for (i) a revolving loan
facility in an aggregate principal amount
of up to $30.0 million outstanding at
any time and (ii) a term loan facility in
an amount of $32.1 million
(collectively, as amended, supplemented,
modified, extended or restated from
time to time, the "Credit Agreement").
2. Terms of Offering. The Initial Purchaser has advised the
Company, and
the Company understands, that the Initial
Purchaser will make offers to sell
(the "Exempt Resales") some or all of the
Notes purchased by the Initial
Purchaser hereunder on the terms set forth
in the Final Offering Circular, as
<PAGE>
amended or supplemented, to persons (the
"Subsequent Purchasers") whom the
Initial Purchaser (i) reasonably believes
to be "qualified institutional buyers"
as defined in Rule 144A under the Act
("QIBs"), as such Rule may be amended from
time to time, (ii) reasonably believes
(based upon written representations made
by such persons to the Initial Purchaser)
to be institutional "accredited
investors" ("Accredited Investors") as
defined in Rule 501(a)(1), (2), (3) or
(7) under the Act or (iii) reasonably
believes to be non-U.S. persons in
reliance upon Regulation S under the
Act.
Pursuant to the terms of the Collateral Agreements, all of the
obligations under the Indenture and the
Notes will be secured by a first
priority lien and security interest in
substantially all of the assets of the
Company and its Subsidiaries (except for a
prior ranking lien by the lenders
under the Credit Agreement) in favor of the
Trustee, as secured party for itself
and for the benefit of the holders of the
Notes, the Exchange Notes and the
Private Exchange Notes (the "Secured
Parties").
Holders of the Notes (including Subsequent Purchasers) will have
the
registration rights set forth in the
registration rights agreement applicable to
the Notes (the "Registration Rights
Agreement"), to be executed on and dated as
of the Closing Date (as hereinafter
defined). Pursuant to the Registration
Rights Agreement, the Company will agree,
among other things, to file with the
Securities and Exchange Commission (the
"SEC") (a) a registration statement
under the Act (the "Exchange Offer
Registration Statement") relating to senior
secured notes (the "Exchange Notes") which
shall be identical to the Notes
(except that the Exchange Notes shall have
been registered pursuant to such
registration statement and will not be
subject to restrictions on transfer or
contain additional interest provisions) to
be offered in exchange for the Notes
(such offer to exchange being referred to
as the "Exchange Offer"), and/or (b)
under certain circumstances, a shelf
registration statement pursuant to Rule 415
under the Act (the "Shelf Registration
Statement") relating to the resale by
certain holders of the Notes. If required
under the Registration Rights
Agreement, the Company will issue Exchange
Notes to the Initial Purchaser (the
"Private Exchange Notes"). If the Company
fails to satisfy its obligations under
the Registration Rights Agreement, it will
be required to pay additional
interest to the holders of the Notes under
certain circumstances, as set forth
in the Registration Rights Agreement.
This Agreement, the Indenture, the Collateral Agreements, the
Registration Rights Agreement, the Notes,
the Exchange Notes and the Private
Exchange Notes are collectively referred to
herein as the "Documents."
3. Purchase, Sale and Delivery. On the basis of the
representations,
warranties, agreements and covenants herein
contained and subject to the terms
and conditions herein set forth, the
Company agrees to issue and sell to the
Initial Purchaser, and the Initial
Purchaser agrees to purchase from the
Company, the Notes at a purchase price of
97% of the principal amount thereof.
Delivery to the Initial Purchaser of and
payment for the Notes shall be made at
a closing (the "Closing") to be held at
10:00 a.m., New York time, on March 17,
2004 (the "Closing Date") at the Rochester,
New York offices of Harris Beach
LLP, or at such other location as agreed to
by the Initial Purchaser and the
Company.
The Company shall deliver to the Initial Purchaser one or more
certificates representing the Notes in
definitive form, registered in such names
and denominations as the Initial Purchaser
may request, against payment by the
Initial Purchaser of the purchase price
therefor by immediately available
federal funds bank wire transfer to such
bank account or accounts as the Company
shall designate to the Initial Purchaser at
least two business days prior to the
Closing Date. The certificates representing
the Notes in definitive form shall
be made available to the Initial Purchaser
for inspection at the New York
offices of Mayer, Brown, Rowe & Maw LLP
(or such other place as shall be
reasonably acceptable to the Initial
Purchaser) not later than 10:00 a.m. one
business day immediately preceding the
Closing Date. Notes to be represented by
one or more definitive global securities in
book-entry form will be deposited on
the
2
<PAGE>
Closing Date, by or on behalf of the
Company, with The Depository Trust Company
("DTC") or its designated custodian, and
registered in the name of Cede & Co.
4. Representations and Warranties of the Company. The Company
represents
and warrants to the Initial Purchaser that,
as of the date hereof and as of the
Closing Date:
(a) The Preliminary Offering Circular as of its date did not, and
the
Final Offering Circular as of its date did
not, and as of the Closing Date will
not, and each supplement or amendment
thereto as of its date will not, contain
any untrue statement of a material fact or
omit to state any material fact
(except, in the case of the Preliminary
Offering Circular, for pricing terms and
other financial terms intentionally left
blank) necessary in order to make the
statements therein, in light of the
circumstances under which they were made,
not misleading; provided, however, that the
Company makes no representation or
warranty as to the information furnished in
writing to the Company by the
Initial Purchaser specifically for use
therein. No injunction or order has been
issued that either (i) asserts that any of
the transactions contemplated by this
Agreement or any other Document is subject
to the registration requirements of
the Act or (ii) would prevent or suspend
the issuance or sale of any of the
Notes or the use of the Preliminary
Offering Circular, the Final Offering
Circular or any amendment or supplement
thereto, in any jurisdiction. Each of
the Preliminary Offering Circular and the
Final Offering Circular, as of their
respective dates, contained, and the Final
Offering Circular, as amended or
supplemented, as of the Closing Date, will
contain, all the information
specified in, and meet the requirements of,
Rule 144A(d)(4) under the Act. There
are no related party transactions that
would be required to be disclosed in the
Final Offering Circular if the Final
Offering Circular were a prospectus
included in a registration statement on
Form S-1 filed under the Act that are
not disclosed in the Final Offering
Circular.
(b) The Company (i) has been duly formed, is validly existing and
is in
good standing under the laws of its
jurisdiction of organization, (ii) has all
requisite power and authority to carry on
its business and to own, lease and
operate its properties and assets, and
(iii) is duly qualified or licensed to do
business and is in good standing as a
foreign corporation, partnership or other
entity, as the case may be, authorized to
do business in each jurisdiction in
which the nature of such businesses or the
ownership or leasing of such
properties requires such qualification,
except where the failure to be so
qualified would not, individually or in the
aggregate, have a material adverse
effect on (A) the properties, business,
prospects, operations, earnings, assets,
liabilities or condition (financial or
otherwise) of the Company, (B) the
ability of the Company to perform its
obligations in all material respects under
any Document, (C) the enforceability of any
Collateral Agreement or the
attachment, perfection or priority of any
of the Liens intended to be created
thereby or (D) the validity of any of the
Documents or the consummation of any
of the transactions contemplated therein
(each, a "Material Adverse Effect").
(c) All of the issued and outstanding Capital Stock of the Company
has
been duly authorized and validly issued,
are fully paid and nonassessable, and
was not issued in violation of, and is not
subject to, any preemptive or similar
rights. The table under the caption
"Capitalization" in the Final Offering
Circular (including the footnotes thereto)
sets forth, as of its date, the
capitalization of the Company. There are no
outstanding (A) options, warrants or
other rights for third parties to purchase
from the Company, (B) agreements,
contracts, arrangements or other
obligations of the Company to issue to third
parties or (C) other rights of third
parties to convert any obligation into or
exchange any securities for, in the case of
each of clauses (A) through (C),
Capital Stock of or other ownership or
equity interests in the Company.
(d) No holder of securities of the Company, other than the holders
of
the Notes, will be entitled to have such
securities registered under the
registration statements required to be
filed by the
3
<PAGE>
Company with respect to the Exchange Notes
and Private Exchange Notes pursuant
to the Registration Rights Agreement.
(e) The Company has all the requisite power and authority to
execute,
deliver and perform its obligations under
the Documents to which it is a party
and to consummate the transactions
contemplated thereby.
(f) This Agreement has been duly and validly authorized, executed
and
delivered by the Company. Each of the
Indenture and the Collateral Agreements
have been duly and validly authorized by
the Company. Each of this Agreement,
the Indenture and the Collateral
Agreements, when executed and delivered by the
Company, will constitute a legal, valid and
binding obligation of the Company,
enforceable against the Company in
accordance with its terms, except that the
enforcement thereof may be subject to (i)
bankruptcy, insolvency,
reorganization, receivership, moratorium,
fraudulent conveyance or other similar
laws now or hereafter in effect relating to
creditors' rights generally and (ii)
general principles of equity (whether
applied by a court of law or equity) and
the discretion of the court before which
any proceeding therefor may be brought.
(g) The Registration Rights Agreement has been duly and validly
authorized by the Company. The Registration
Rights Agreement, when executed and
delivered by the Company, will constitute a
legal, valid and binding obligation
of the Company, enforceable against the
Company in accordance with its terms,
except that (A) the enforcement thereof may
be subject to (i) bankruptcy,
insolvency, reorganization, receivership,
moratorium, fraudulent conveyance or
other similar laws now or hereafter in
effect relating to creditors' rights
generally and (ii) general principles of
equity (whether applied by a court of
law or equity) and the discretion of the
court before which any proceeding
therefor may be brought and (B) any rights
to indemnity or contribution
thereunder may be limited by federal and
state securities laws and public policy
considerations.
(h) The Notes, when issued, will be in the form contemplated by
the
Indenture. The Indenture meets the
requirements for qualification under the
Trust Indenture Act of 1939, as amended
(the "TIA"). The Notes, Exchange Notes
and Private Exchange Notes have each been
duly and validly authorized by the
Company and, in the case of the Notes, when
delivered to and paid for by the
Initial Purchaser in accordance with the
terms of this Agreement and the
Indenture, will have been duly executed,
issued and delivered and will be legal,
valid and binding obligations of the
Company, entitled to the benefit of the
Indenture, the Collateral Agreements and
the Registration Rights Agreement, and
enforceable against the Company in
accordance with their terms, except that the
enforcement thereof may be subject to (i)
bankruptcy, insolvency,
reorganization, receivership, moratorium,
fraudulent conveyance or other similar
laws now or hereafter in effect relating to
creditors' rights generally and (ii)
general principles of equity (whether
applied by a court of law or equity) and
the discretion of the court before which
any proceeding therefor may be brought.
Upon and following delivery to the Initial
Purchaser, the Notes will rank pari
passu with all senior Indebtedness of the
Company that is outstanding on the
date hereof or that may be incurred
hereafter and senior to all other
subordinated Indebtedness of the Company
that is outstanding on the date hereof
or that may be incurred hereafter.
(i) The Company is not in violation of its certificate of
formation,
operating agreement or any other
organizational documents (the "Charter
Documents"). The Company is not (i) in
violation of any federal, state, local or
foreign statute, law (including, without
limitation, common law) or ordinance,
or any judgment, decree, rule, regulation
or order (collectively, "Applicable
Law") of any federal, state, local and
other governmental authority,
governmental or regulatory agency or body,
court, arbitrator or self-regulatory
organization, domestic or foreign (each, a
"Governmental Authority"), or (ii) in
breach of or default under any bond,
debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of
trust, lease or any other agreement
or instrument to which any of them is a
party or by which any of
4
<PAGE>
them or their respective property is bound
(collectively, "Applicable
Agreements"), other than as disclosed in
the Final Offering Circular. There
exists no condition that, with the passage
of time or otherwise, would (a)
constitute a violation of such Charter
Documents or Applicable Laws, (b)
constitute a breach of or default under any
Applicable Agreement or (c) result
in the imposition of any penalty or the
acceleration of any indebtedness.
(j) Neither the execution, delivery or performance of the Documents
nor
the consummation of any transactions
contemplated therein will conflict with,
violate, constitute a breach of or a
default (with the passage of time or
otherwise) under, require the consent of
any person (other than consents already
obtained and in full force and effect)
under, result in the imposition of any
liens, security interests, mortgages,
pledges, charges, equities, claims or
restrictions on transferability or
encumbrances of any kind (collectively,
"Liens") on any assets of the Company
(except for Liens created pursuant to the
Documents and the Credit Agreement), or
result in an acceleration of
indebtedness under or pursuant to (i) the
Charter Documents, (ii) any Applicable
Agreement, or (iii) any Applicable Law.
After consummation of the Offering and
transactions contemplated in the Documents,
no Default or Event of Default under
the Indenture will exist.
(k) When executed and delivered, the Documents will conform in
all
material respects to the descriptions
thereof in the Final Offering Circular.
(l) No consent, approval, authorization or order of any
Governmental
Authority, or third party is required for
the issuance and sale by the Company
of the Notes to the Initial Purchaser or
the consummation by the Company of the
other transactions contemplated hereby,
except such as have been obtained (and
are in full force and effect) and such as
may be required under state securities
or "Blue Sky" laws in connection with the
purchase and resale of the Notes by
the Initial Purchaser.
(m) There is no action, claim, suit, demand, hearing, notice of
violation or deficiency, or proceeding,
domestic or foreign (collectively,
"Proceedings"), pending or, to the
knowledge of the Company, threatened, that
either (i) seeks to restrain, enjoin,
prevent the consummation of, or otherwise
challenge any of the Documents or any of
the transactions contemplated therein,
or (ii) except as described in the Offering
Circular, would, individually or in
the aggregate, have a Material Adverse
Effect. The Company is not subject to any
judgment, order, decree, rule or regulation
of any Governmental Authority that
would, individually or in the aggregate,
have a Material Adverse Effect.
(n) The Company possesses all licenses, permits, certificates,
consents,
orders, approvals and other authorizations
from, and has made all declarations
and filings with, all Governmental
Authorities, presently required or necessary
to own or lease, as the case may be, and to
operate its properties and to carry
on its business as now or proposed to be
conducted as set forth in the Final
Offering Circular ("Permits"), except where
the failure to obtain such Permits
would not, individually or in the
aggregate, have a Material Adverse Effect; the
Company has fulfilled and performed all of
its obligations with respect to such
Permits and no event has occurred which
allows, or after notice or lapse of time
would allow, revocation or termination
thereof or results in any other material
impairment of the rights of the holder of
any such Permit; and the Company has
not received any notice of any proceeding
relating to revocation or modification
of any such Permit, except as described in
the Final Offering Circular or except
where such revocation or modification would
not, individually or in the
aggregate, have a Material Adverse
Effect.
(o) The Company has good and marketable title to all real property
owned
by it and good title to all personal
property owned by it and good and
indefeasible title to all leasehold estates
in real and personal property being
leased by it and, as of the Closing Date,
will be free and clear of all Liens
(other than Permitted Liens). All
Applicable Agreements to which the Company is
a party or by which it is
5
<PAGE>
bound are valid and enforceable against the
Company and, to the knowledge of the
Company, are valid and enforceable against
the other party or parties thereto
and are in full force and effect with only
such exceptions as would not,
individually or in the aggregate, have a
Material Adverse Effect. The assets of
the Company include all of the assets and
properties necessary or required in,
or otherwise material to, the conduct of
the Company's business as currently
conducted and as proposed to be conducted
(as described in the Final Offering
Circular), and such assets are in good
working condition, except where the
failure of such assets to be in working
condition would not, individually or in
the aggregate, have a Material Adverse
Effect.
(p) All Tax returns required to be filed by the Company have been
filed
and all such returns are true, complete,
and correct in all material respects.
All material Taxes that are due from the
Company have been paid other than those
(i) currently payable without penalty or
interest or (ii) being contested in
good faith and by appropriate proceedings
and for which adequate reserves have
been established in accordance with
generally accepted accounting principles of
the United States, consistently applied
("GAAP"). There are no actual or, to the
knowledge of the Company after due inquiry,
proposed Tax assessments against the
Company that would, individually or in the
aggregate, have a Material Adverse
Effect. The accruals and reserves on the
books and records of the Company in
respect of any material Tax liability for
any period not finally determined are
adequate to meet any assessments of Tax for
any such period. For purposes of
this Agreement, the term "Tax" and "Taxes"
shall mean all federal, state, local
and foreign taxes, and other assessments of
a similar nature (whether imposed
directly or through withholding),
including, without limitation, any interest,
additions to tax, or penalties applicable
thereto.
(q) The Company owns, or is licensed under, and has the right to
use,
all patents, patent rights, licenses,
inventions, copyrights, know-how
(including, without limitation, trade
secrets and other unpatented and/or
unpatentable proprietary or confidential
information, systems or procedures),
trademarks, service marks and trade names
(collectively, "Intellectual
Property") necessary for the conduct of its
business and, as of the Closing
Date, will be free and clear of all Liens,
other than Permitted Liens. No claims
or notices of any potential claim have been
asserted by any person challenging
the use of any such Intellectual Property
by the Company or questioning the
validity or effectiveness of the
Intellectual Property or any license or
agreement related thereto (other than any
claims that, if successful, would not,
individually or in the aggregate, have a
Material Adverse Effect). The use of
such Intellectual Property by the Company
will not infringe on the Intellectual
Property rights of any other person.
(r) The Company maintains a system of internal accounting
controls
sufficient to provide reasonable assurance
that (i) material transactions are
executed in accordance with management's
general or specific authorization, (ii)
material transactions are recorded as
necessary to permit preparation of
financial statements in conformity with
GAAP, and to maintain asset
accountability, (iii) access to assets is
permitted only in accordance with
management's general or specific
authorization and (iv) the recorded
accountability for assets is compared with
the existing assets at reasonable
intervals and appropriate action is taken
with respect to any material
differences.
(s) The audited financial statements and related notes of the
Company
contained in the Final Offering Circular
(the "Financial Statements") present
fairly the financial position, results of
operations and cash flows of the
Company, as of the respective dates and for
the respective periods to which they
apply and have been prepared in accordance
with GAAP and the requirements of
Regulation S-X of the Act. The financial
data set forth under "Summary Financial
Data" and "Selected Financial Information"
included in the Final Offering
Circular have been prepared on a basis
consistent with that of the Financial
Statements and present fairly the financial
position and results of
operations of the Company as of the
respective dates and for the respective
periods indicated. All other financial,
statistical, and market and
industry-related data included in the Final
Offering Circular are fairly and
accurately presented and are
6
<PAGE>
based on or derived from sources that the
Company believes to be reliable and
accurate. PricewaterhouseCoopers LLP are
independent public accountants with
respect to the Company.
(t) The pro forma financial information and the related notes of
the
Company set forth in the Final Offering
Circular include assumptions that were
made in good faith and provide a reasonable
basis for presenting the significant
effects directly attributable to the
transactions and events described therein.
The related pro forma adjustments give
appropriate effect to those assumptions
and the pro forma adjustments reflect the
proper application of those
adjustments to the historical financial
statement amounts in the pro forma
financial data included in the Final
Offering Circular.
(u) Subsequent to the respective dates as of which information is
given
in the Final Offering Circular, except as
adequately disclosed in the Final
Offering Circular, (i) the Company has not
incurred any liabilities, direct or
contingent, that are material, individually
or in the aggregate, to the Company,
or has entered into any transactions not in
the ordinary course of business,
(ii) there has not been any material
decrease in the Capital Stock or any
material increase in long-term indebtedness
or any material increase in
short-term indebtedness of the Company, or
any payment of or declaration to pay
any dividends or any other distribution
with respect to the Company, and (iii)
there has not been any material adverse
change in the properties, business,
prospects, operations, earnings, assets,
liabilities or condition (financial or
otherwise) of the Company (each of clauses
(i), (ii) and (iii), a "Material
Adverse Change") since September 30, 2003.
To the knowledge of the Company after
due inquiry, there is no event that is
reasonably likely to occur, which if it
were to occur, would, individually or in
the aggregate, have a Material Adverse
Effect, except such events that have been
adequately disclosed in the Final
Offering Circular.
(v) No "nationally recognized statistical rating organization" (as
such
term is defined for purposes of Rule
436(g)(2) under the Act) (i) has imposed
(or has informed the Company that it is
considering imposing) any condition
(financial or otherwise) on the Company
retaining any rating assigned to the
Company or to any securities of the
Company, or (ii) has indicated to the
Company that it is considering (A) the
downgrading, suspension, or withdrawal
of, or any review for a possible change
that does not indicate the direction of
the possible change in, any rating so
assigned, or (B) any change in the outlook
for any rating of the Company or any
securities of the Company.
(w) All indebtedness represented by the Notes is being incurred for
the
purposes described in the Offering Circular
and in good faith. On the Closing
Date, the Company (i) will be solvent, (ii)
will have sufficient capital with
which to conduct the business it is
presently conducting and presently
anticipates conducting and (iii) will be
able to pay its debts as they mature.
(x) The Company has not and, to its knowledge after due inquiry, no
one
acting on its behalf has, (i) taken,
directly or indirectly, any action
designed to cause or to result in, or that
has constituted or which might
reasonably be expected to constitute, the
stabilization or manipulation of the
price of any security of the Company to
facilitate the sale or resale of any of
the Notes, (ii) sold, bid for, purchased,
or paid anyone any compensation for
soliciting purchases of, any of the Notes,
or (iii) except as disclosed in the
Final Offering Circular, paid or agreed to
pay to any person any compensation
for soliciting another to purchase any
other securities of the Company.
(y) Without limiting any provision herein, no registration under
the Act
and no qualification of the Indenture under
the TIA is required for the sale of
the Notes to the Initial Purchaser as
contemplated hereby or for the Exempt
Resales, assuming (i) that the purchasers
in the Exempt Resales are QIBs or
Accredited Investors or non-U.S. persons
and (ii) the accuracy of the Initial
Purchaser's representations contained
herein regarding the absence of general
solicitation in connection with the sale of
the Notes to the Initial Purchaser
and in the Exempt Resales.
7
<PAGE>
(z) The Notes are eligible for resale pursuant to Rule 144A under
the
Act and no other securities of the
Company are of the same class (within the
meaning of Rule 144A under the
Act) as the Notes and listed on a national
securities exchange registered
under Section 6 of the Securities Exchange Act
of 1934, as amended (the "Exchange
Act"), or quoted in a U.S. automated
inter-dealer quotation system. No
securities of the Company of the same class
as the Notes have been offered,
issued or sold by the Company or any of its
Affiliates within the six-month
period immediately prior to the date hereof.
(aa) Neither of the Company nor any of its Affiliates or other
persons
acting on behalf of the Company
has offered or sold the Notes by means of any
general solicitation or general
advertising within the meaning of Rule 502(c)
under the Act or, with respect to
Notes sold outside the United States to
non-U.S. persons (as defined in
Rule 902 under the Act), by means of any
directed selling efforts within
the meaning of Rule 902 under the Act, and the
Company, each Affiliate of the
Company and each other person acting on behalf
of the Company have complied with
and will implement the "offering
restrictions" within the meaning
of such Rule 902; provided, that no
representation is made in this
subsection with respect to the actions of the
Initial Purchaser.
(bb) Each of the Company and each ERISA Affiliate has fulfilled
its
obligations, if any, under the
minimum funding standards of Section 302 of the
Employee Retirement Income
Security Act of 1974, as amended ("ERISA") with
respect to each "pension plan" (as
defined in Section 3(2) of ERISA), subject
to Section 302 of ERISA which the
Company or any ERISA Affiliate sponsors or
maintains, or with respect to
which it has (or within the last three years had)
any obligation to make
contributions, and each such plan is in compliance in
all material respects with the
presently applicable provisions of ERISA and the
Code (as defined below). Neither
the Company nor any ERISA Affiliate has
incurred any unpaid liability to
the Pension Benefit Guaranty Corporation
(other than for the payment of
premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
"ERISA Affiliate" means a corporation, trade or
business that is, along with the
Company, a member of a controlled group of
corporations or a controlled group
of trades or businesses, as described in
Section 414 of the Internal
Revenue Code of 1986, as amended (the "Code") or
Section 4001 of ERISA.
(cc) (i) no labor strike, work stoppage, slowdown, or other
material
labor dispute is pending against the
Company, or, to the knowledge of the
Company, after due inquiry, threatened
against the Company; (ii) there is no
worker's compensation liability, experience
or matter that could be reasonably
expected to have a Material Adverse Effect;
(iii) to the knowledge of the
Company, after due inquiry, there is no
threatened or pending liability against
the Company pursuant to the Worker
Adjustment Retraining and Notification Act of
1988, as amended ("WARN"), or any similar
state or local law; (iv) there is no
employment-related charge, complaint,
grievance, investigation, unfair labor
practice claim, or inquiry of any kind,
pending against the Company that could,
individually or in the aggregate, have a
Material Adverse Effect; (v) to the
knowledge of the Company, after due
inquiry, no employee or agent of the Company
has committed any act or omission giving
rise to liability for any violation
identified in subsection (iii) and (iv)
above, other than such acts or omissions
that would not, individually or in the
aggregate, have a Material Adverse
Effect; and (vi) no term or condition of
employment exists through arbitration
awards, settlement agreements, or side
agreements that is contrary to the
express terms of any applicable collective
bargaining agreement. (dd) None of
the transactions contemplated in the
Documents or the application by the Company
of the proceeds of the Notes will violate
or result in a violation of Section 7
of the Exchange Act (including, without
limitation, Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal
Reserve System).
(ee) The Company is not an open-end investment company, unit
investment
trust or face-amount certificate company
that is or is required to be registered
under Section 8 of the United States
8
<PAGE>
Investment Company Act of 1940, as amended
(the "Investment Company Act"); and
the Company is not and, after giving effect
to the offering and sale of the
Notes and the application of the proceeds
thereof as described in the Final
Offering Circular, will not be an
"investment company" as defined in the
Investment Company Act.
(ff) The Company has not engaged any broker, finder, commission
agent or
other person (other than the Initial
Purchaser and Cohen & Company, LLC) in
connection with the Offering or any of the
transactions contemplated in the
Documents, and the Company is not under any
obligation to pay any broker's fee
or commission in connection with such
transactions (other than commissions or
fees to the Initial Purchaser and Cohen
& Company, LLC).
(gg) The Company (i) is in compliance with all applicable
foreign,
federal, state and local laws and
regulations relating to the protection of the
environment or hazardous or toxic
substances of wastes, pollutants or
contaminants ("Environmental Laws"), (ii)
has received and is in compliance with
all permits, licenses or other approvals
required of it under applicable
Environmental Laws to conduct its business
and (iii) has not received notice of
any actual or potential liability for the
investigation or remediation of any
disposal or release of hazardous or toxic
substances or wastes, pollutants or
contaminants, in each case except where
such non-compliance with Environmental
Laws, failure to receive and comply with
required permits, licenses or other
approvals, or liability would not,
individually or in the aggregate, have a
Material Adverse Effect, whether or not
arising from transactions in the
ordinary course of business. The Company
has not been named as a "potentially
responsible party" under the Comprehensive
Environmental Response, Compensation,
and Liability Act of 1980, as amended.
In the ordinary course of its business, the Company periodically
reviews
the effect of Environmental Laws on the
business, operations and properties of
the Company, in the course of which it
identifies and evaluates associated costs
and liabilities (including, without
limitation, any capital or operating
expenditures required for clean-up, closure
of properties or compliance with
Environmental Laws, or any permit, license
or approval, any related constraints
on operating activities and any potential
liabilities to third parties). On the
basis of such review, the Company has
reasonably concluded that such associated
costs would not have a Material Adverse
Effect.
(hh) As of the Closing Date, except as described in the
Offering
Circular and as provided in the Credit
Agreement, there will be no encumbrances
or restrictions on the ability of any
Subsidiary of the Company (x) to pay
dividends or make other distributions on
such Subsidiary's Capital Stock or to
pay any indebtedness to the Company or any
other Subsidiary of the Company, (y)
to make loans or advances or pay any
indebtedness to, or investments in, the
Company or any other Subsidiary of the
Company or (z) to transfer any of its
property or assets to the Company or any
other Subsidiary of the Company.
(ii) Each certificate signed by any officer of the Company
delivered to
the Initial Purchaser shall be deemed a
representation and warranty by the
Company (and not individually by such
officer) to the Initial Purchaser with
respect to the matters covered thereby.
(jj) The Company is insured by insurers of recognized financial
responsibility against such losses and
risks and in such amounts as are prudent
and customary in the business in which it
is engaged. All policies of insurance
insuring the Company or its business,
assets, employees, officers and directors
are in full force and effect. The Company
is in compliance with the terms of
such policies and instruments in all
material respects, and there are no claims
by the Company under any such policy or
instrument as to which any insurance
company is denying liability or defending
under a reservation of rights clause.
The Company has not been refused any
insurance coverage sought or applied for,
and the Company has no reason to believe
that it will not be able to renew its
existing insurance coverage as and when
such coverage expires or to obtain
similar coverage from similar insurers as
may be necessary to
9
<PAGE>
continue its business at a cost that would
not, individually or in the
aggregate, have a Material Adverse
Effect.
(kk) All information certified to by an officer of the Company in
the
Perfection Certificate, dated as of March
17, 2004 (the "Perfection
Certificate") is true and correct as of the
date hereof and will be true and
correct as of the Closing Date.
(ll) (a) Upon:
(i) execution and delivery of the Collateral Agreements by the
Company and the Collateral Agent (as defined therein) and
compliance by
the Company with its obligations thereunder; and
(ii)
(A) the
filing or recording of the Collateral Agreements
or appropriate financing statements with the
appropriate filing records, registry, or other public
office, together with the payment of the requisite
filing or recordation fees related thereto,
(B) in the case of Motor Vehicles (as defined in the
Security Agreement), upon the recordation or notation of
the Collateral Agent's security interest on the
certificates of title or ownership in respect of such
Motor Vehicles and the filing of the Uniform Commercial
Code
financing statements delivered by the Company
having an interest in such Motor Vehicles to the
Collateral Agent with respect to such Motor Vehicles,
(C) in the case of Collateral comprised of any deposit
account and cash, checks, drafts, notes, bills of
exchange, money orders and other like instruments held
therein, upon the execution and delivery of a Deposit
Account Agreement (as defined in the Security
Agreement), by the Company, the Administrative Agent and
the depositary at which such deposit account is
maintained, the Administrative Agent will for the
benefit of the Secured Parties have "control" (as
defined in Section 9-104(a) of the New York UCC) over
such deposit account and all cash, checks, drafts,
notes, bills of exchange, money orders and other like
instruments held therein and such security interest will
be a valid perfected security interest (subject in
priority only to the Liens securing the Credit
Agreement); and
(D) the filing of appropriately completed Uniform
Commercial Code Form UCC-1 financing statements (the
"Financing Statements") naming the Company as a debtor
and the Collateral Agent as the secured party in the
appropriate filing office in New York, together with the
payment of the requisite filing fees related thereto,
the security interest of the Collateral Agent in the Collateral
(as defined in the Collateral Agreements) will be a valid and
enforceable perfected security interest, which security
interest
will be superior to and prior to the rights of all third
persons
other than holders of Permitted Liens.
(b) As of the Closing Date, except with respect to Permitted
Liens, there will be no currently effective financing
statement,
security agreement, chattel mortgage, real estate mortgage or
other
document filed or recorded with any filing records, registry, or
other
public
10
<PAGE>
office, that purports to cover, affect or give notice of any
present or
possible future Lien on, or security interest in, any assets or
property
of the Company or any rights thereunder.
5. Covenants of the Company. The Company hereby agrees:
(a) To (i) advise the Initial Purchaser promptly after
obtaining
knowledge (and, if requested by the Initial
Purchaser, confirm such advice in
writing) of (A) the issuance by any state
securities commission of any stop
order suspending the qualification or
exemption from qualification of any of the
Notes for offer or sale in any
jurisdiction, or the initiation of any proceeding
for such purpose by any state securities
commission or other regulatory
authority, or (B) the happening of any
event that makes any statement of a
material fact made in the Final Offering
Circular untrue or that requires the
making of any additions to or changes in
the Final Offering Circular in order to
make the statements therein, in the light
of the circumstances under which they
were made, not misleading, (ii) use its
reasonable best efforts to prevent the
issuance of any stop order or order
suspending the qualification or exemption
from qualification of any of the Notes
under any state securities or Blue Sky
laws, and (iii) if, at any time, any state
securities commission or other
regulatory authority shall issue an order
suspending the qualification or
exemption from qualification of any of the
Notes under any such laws, use its
reasonable best efforts to obtain the
withdrawal or lifting of such order at the
earliest possible time.
(b) To (i) furnish the Initial Purchaser, without charge, as many
copies
of the Final Offering Circular, and any
amendments or supplements thereto, as
the Initial Purchaser may reasonably
req
